CANADA FX DEBT-C$ strengthens as risk appetite returns

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* C$ up after falling five straight sessions

* Bonds lower across the board as global stocks rally

By Jennifer Kwan

TORONTO, Jan 16 (Reuters) - The Canadian dollar rose on Friday after falling five straight sessions against the U.S. currency, supported by firmness in commodity prices and a return by investors to riskier assets as world equity markets rallied.

The strength comes after the Canadian unit touched its weakest level in a month against the U.S. currency on Thursday.

At 9:07 a.m. (1407 GMT), the Canadian currency was at C$1.2387 to the U.S. dollar, or 80.73 U.S. cents, up from C$1.2515 to the U.S. dollar, or 79.90 U.S. cents, on Thursday.

“It’s all being driven right now by risk aversion,” said George Davis, chief technical strategist at RBC Capital Markets.

World stocks rallied on Friday as U.S. steps to aid banks helped eclipse big fourth-quarter losses from Citigroup (C.N) and Bank of America (BAC.N).

Domestic government bond prices in both Canada and the United States, which had been boosted in recent sessions by safe-haven buying, were lower across the board. (Reporting by Jennifer Kwan; editing by Jeffrey Hodgson)